Lifestyle in retirement is an issue that many leave to very late in life consider.

At 4 June 2016 a single retiree would receive an age pension of $22,721.40 and a couple combined would receive $34,252.

These amounts may be subject to reduction depending on each individual’s assets and/or other sources of income.

It makes good sense to plan well ahead to ensure you have a comfortable retirement. Superannuation savings makes good sense because it is tax effective and in retirement pension accounts earnings are generally tax-free.

Have you ever considered what you would do if a business partner died prematurely or suffered a major illness and couldn’t work?

Many small businesses not only lose the services of an owner they also lose that persons expertise and face the potentially harrowing experience of buying them or their families out.

Would your business have the required capital to pay out family members?

Would you be able to fill the shoes of the lost partner or would you need to employ someone?

So if and when this happens, what are your options?

Options Available

There are several options available to remaining owners including:

Bring the Partners family into the businessOur experience with small business tells us that most times the business partners bring certain skills and expertise to the business. Ask your self would I want to work with my business partner’s family who may or may not have the same expertise?

Buy Out the Partner or Remaining Family MembersOur experience tells us that most remaining partners would prefer to take over the equity of their deceased partners. However would the business have sufficient cash reserves to buy back shares and pay out unappropriated profits and good will? This will usually result in tax obligations and a huge drain on company and personal assets. Of course you can always go to the bank but would you qualify for additional loans either personally or through your business?

Sell Business AssetsIt may be that your business has substantial assets that could be sold to meet the cost of retiring equity. However what impact will this have on your ability to produce revenues for your business?

At Infinite Financial Solutions we have the expertise to assist you putting plans in place that will minimise the impact on your business should a catastrophe occur and one of your partners or an essential team member dies or becomes seriously ill and can not work.